Industrial Relations
Korgaonkar K A
Hr - Incharge
Manager- Hr Compliance
Balvant Dodiya
Hr Manager
Rajiv Pratap
Senior Executive Operations Industrial Relation,
+5 Others

Thread Started by #korgaonkar k a

Dear All,

Please find below is an article published on

Labour welfare cess and its implications for the construction industry

By Anup Koushik Karavadi

The construction industry in India is witnessing a boom fuelled by growing demands for infrastructure, commercial space and residential accommodation for the aspirational middle class. The industry is intricately tied to economic growth and creation of jobs, which in turn results in increasing consumer spending and growth, so the cycle is complete. While it is acknowledged that the industry is a labor intensive one, the persons, including a large number of women employed in the industry are unskilled, temporary and therefore unorganized and tend to work under inhuman and pitiful conditions.

The plight of the construction labourer seeks to be at least legally addressed in certain legislations. The Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996 (BOCW Act) stipulates the welfare measures that have to be undertaken by the employers for its workers in the construction and building industry. Further, The Building and Other Construction Workers Welfare Cess Act, 1996, (Cess Act) has been enacted for levy and collection of cess on the ‘cost of construction’ incurred, from the relevant ‘employer’ with a view to augment the resources for the Building and Other Construction Workers’ Welfare Boards constituted under the BOCW Act.

Both the Acts have imposed the obligation of implementation on the respective state governments and hence, though the Acts have been in force since 1996-97, the implementation of the Acts has been erratic warranting directions from the Supreme Court of India in the National Campaign Committee for Central Legislation on Construction Labour v.Union of India [2012 (2) SLJ471 (SC)] to the governments of various states and union territories to implement the Acts and constitute the Welfare Boards and collect the Cess as contemplated under the said Acts. Thus it is relevant for the developers, employers’ and the contractors who are in the business of construction to be aware of the implications of the said Acts. This article proposes to highlight two of the many implications which may result due to the implementation of the said Acts.

Acts and their implications

The said Acts apply to every ‘establishment’ which employs ten or more ‘building workers’ in any ‘building or other construction work’ anytime during the preceding twelve months. The BOCW Act requires every employer in relation to an establishment to which the BOCW Act applies to make an application to the registering officer for registration of establishment within sixty days from the date of commencement of the construction work. Further, the Cess Act mandates every ‘employer’ in relation to an establishment who carries on building and construction work to pay a cess of 1% (see end note 1) of the ‘cost of construction’.

Registration of the establishment under the BOCW Act

The term ‘establishment’ includes an establishment belonging to the contractor and also the establishment where building and other construction work have commenced or proposed to commence. It is relevant to understand that the term 'building or other construction works' has a wide meaning and includes alteration, repairs, maintenance or demolition, of or, in relation to, any public works, infrastructure projects or buildings and residences (Not included when the construction cost of residences does not exceed INR 1,000,000). From the provisions of the BOCW Act it could be inferred that registration under the Act is establishment specific and not employer specific. It is a moot point as to whether the employer has to register the site where the building and other construction work have commenced (or proposed to be commenced) or the establishment from where the employer carries out its business. However, as Section 46 of the BOCW Act requires the employer to give a notice of commencement of construction work to the inspector having jurisdiction in the area where the site is located, the employer may register the establishment from where it carries out the business and issue a notice of commencement whenever it initiates a building or construction work.

Liability to pay cess

As per the Act, the employer in relation to an establishment means, the owner thereof and includes the contractor in case where the building or other construction work is carried on by or through a contractor. Section 3 (charging section) of the Cess Act along with such a definition certainly does not specify whether the cess has to be paid by the owner or the contractor with respect to an establishment. Such a query has been partially addressed by the Courts in Builders Association of India v. UOI [(139) 2007 DLT 578] and New India Construction Company v. State of Haryana (see end note 2) by observing that under the scheme of the BOCW Act, the intention was not to confine the applicability of the Acts to the owner or the contractor but to cover both. The cess should be collected from either the owner or the contractor. The Court has also suggested that if the cess is not collected from the contractor then the same may be collected from the owner.


While it is commendable that the government has woken up to the long neglected construction worker’s welfare, there has been lack of clarity and will in implementation and enforcement until the courts have stepped in to fill the gap. It is understood that the Central Government is also planning to table amendments (see end note 3) to the Acts which shall widen the scope of applicability of the Acts to enable the respective state governments to implement the Acts with ease and it is hoped that the cess so collected will truly benefit the construction workers by providing better and safer work conditions. This is a wake up call to owners, employers and contractors engaged in construction activity to ensure strict compliance and take this cess into account while calculating project costs.

End notes:

1. The Government of India vide Notification No. S-61011/9/95-RW [SO.2899] dated the 26th September, 1996 has provided that cess for the purposes of the BOCW Act, shall be levied at 1% of the cost of construction incurred by an employer.

2. Unreported – Cited in (2011) ILLJ 307 P&H

3. Press note released by the Cabinet on 1st November, 2012, detailing the proposed amendments.

[The author is a Senior Associate, Corporate Practice, Lakshmikumaran & Sridharan, Hyderabad]

Courtesy: News & Publications By Lakshmikumaran & Sridharan (L&S)
20th December 2012 From India, Mumbai
Dear All, Can u pls update me on the formalities regarding Beneficiary of workmen under BOCW Act/ Rules. Thks, Anil Sharma
21st December 2012 From India, Pune
Dear Sir,
we are in to mechanical construction field and we have taken some fabrication & Erection project in Adani port company where they are emphasizing us to register for BOCW. so, are we coming under the act critaria, its not our premises but we are contractor over there. There is marine applies so, due to that they are asking for the same??
Kindly confirm me in the same regard..
Thanking you,
awaiting for your valuable reply..
Thanking you,
Balvant Dodiya
21st December 2012 From India, Anand
I am a senior manager in a reputed construction conglomerate. We pay the cess by way of deduction at source @ 1% of the bill amount. So, we pay the cess in crores annually. There are very large number of companies of such or a larger magnitude. So the overall remittance is a handsome one. Where the money goes actually. Is it really spent on labor's/worker's welfare? I do not think so. A large part of it might be drained out. The labor get nothing out of it in cash or kind.

Would it not be improper to bifurcate the same? One part (say .5%) may be deducted for government exchequer for comprehensive long term schemes and the other part (balance .5%) for the labor of the same project with adequate monitoring by labor department. Welfare policies concerning local workers related to their socio-economical, education and other related may be dealt with. As the environment mitigation plans, safety plans, insurance etc. are mandatory why such plans as regards labor welfare may not be made compulsory for projects.
21st December 2012 From India, Mumbai
Anil ji,

Formality i.e. Procedure of registering beneficiaries vary in every state. In Maharashtra, you need to apply for the said registration in Form 5 together with appendix A with following documents of beneficiaries:

1. Photographs ( 2 nos.);

2. Address proof or certificate by employer stating the beneficiary is residing in labour camp provided by him;

3. Age proof ( in absence of age proof, a certificate by employer with doctor’s certificate)

Rs. 85/- towards registration fee (Rs. 25/-) and monthly contribution (Rs. 5/- per month for 12 months in advance, total Rs. 60/-) payable.

The procedure is kept on changing as per the will of the officer. Also there is no uniformity in this, in each office in Maharashtra.

I am attaching herewith From 5, Appendix A, Form of Certificates by employer (as stated above) for your ready reference.

Now question is to be asked by some one, how many registrations have been done so far during last 2-3 years time? But if you have not applied for registration then it is a default on your part.
21st December 2012 From India, Mumbai

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File Type: doc BOCWA_BENEFICIARY REGISTRATION.doc (790.5 KB, 1107 views)
File Type: pdf BOCW_Employer Certificate & Address Proof.pdf (45.5 KB, 784 views)
File Type: docx BOCW_EMPLOYER CERT & ADDR PROOF.doc.DOCX (11.0 KB, 661 views)

Dear Balvant Dodiya ji,

BOCW Act applies to every establishment which employs, or had employed on any day of the preceding twelve months, ten or more building workers in any building or other construction work.

Building or other construction work means the work of construction, alteration, repairs, maintenance or demolition, of or, in relation to, buildings, streets, roads, railways, tramways, airfields, irrigation, drainage, embankment and navigation works, flood control works (including storm water drainage works), generation, transmission and distribution of power, water works (including channels for distribution of water), oil and gas installations, electric lines, wireless, radio, television, telephone, telegraph and overseas communications, dams, canals, reservoirs, watercourses, tunnels, bridges, viaducts, aquaducts, pipelines, towers, cooling towers, transmission towers and such other work as may be specified in this behalf by the appropriate Government, by notification but does not include any building or other construction work to which the provisions of the Factories Act, 1948 or the Mines Act, 1952 apply.

Accordingly to this, the Act is applicable to your work site.

Establishment under this Act means any establishment belonging to, or under the control of, Government, any body corporate or firm, an individual or association or other body of individuals which or who employs building workers in any building or other construction work; and includes an establishment belonging to a contractor, but does not include an individual who employs such workers in any building or contraction work in relation to his own residence the total cost of such construction not being more than rupees ten lakhs.

Every employer in relation to an establishment to which this Act applies, is liable to register his establishment under the Act on its commencement, within a period of sixty days from such commencement.

Accordingly, you being an establishment belonging to a contractor, are liable to register your establishment under the Act.

(Please be noted from the provisions of the BOCW Act that, it could be inferred that registration under the Act is establishment specific and not employer specific.)

I hope my answer is up to your satisfaction.
21st December 2012 From India, Mumbai
Dear Shri_rk,

I appreciate your feelings and agree with you cent percent. But you and I can not change any enactment. We have no option but to pay the cess as per law.

We pay cess in crores but what is the social security or welfare of the construction labour? Where this money goes?

Of-late, various state governments have started some welfare just to show SC.

Given below is a text of article published in TNN Nov 29, 2011 for your and other members information:

SC threatens contempt to force implementation of construction worker welfare law

NEW DELHI: Millions of workers engaged in the construction sector may son get the promised welfare measures with the Supreme Court on Monday issuing notices to all states and Union Territories asking them to show cause why contempt proceedings be not initiated against officers for non-implementation of two labour friendly laws.

A bench of Chief Justice S H Kapadia and Justices A K Patnaik and Swatanter Kumar said all states and UTs had failed to honour the apex court's orders for full implementation of the Building and Other Construction Workers (Regulation of Employment and Condition of Service) Act, 1996, and the Building and Other Construction Workers Welfare Cess Act, 1996.

"Since almost every state and Union Territory is in contempt on one head or the other, we have no option but to take further steps. However, to give one final opportunity, we direct them to show cause why contempt proceedings be not initiated against concerned officers," the bench said.

With senior advocate Colin Gonsalves, who appeared for NGO 'National Campaign Committee for Central Legislation on Construction Labour' (NCC-CL), complained that the 12-year-old legislations remained dead laws, the bench brushed aside pleas from counsel for states who said they would file affidavits.

The bench said, "Now you face the music. We do not want affidavits. We want compliance of our orders. Question is of disbursal of the cess collected from contractors and not collecting and sitting over it."

The NGO had alleged that Delhi government had collected Rs 140 crore from builders as cess over the years to spend on welfare of workers in the construction sector but not a single penny had gone out of its coffers.

Five years ago, the apex court had sought responses from the Centre and all states why a law intending to provide security net to millions of workers in the construction sector had not been implemented. NCC-CL had alleged that rate of fatal accidents involving construction workers was 160-250 per 1,000 compared to 60-80 per 1,000 in the manufacturing sector, which was the highest in the world.

The laws envisage levying 2% cess on contractors and building a corpus to compensate workers and their family members in case of an accident or death at the construction site. The apex court had in a recent judgment upheld the constitutional validity of the 2% cess.
22nd December 2012 From India, Mumbai
Dear All, Please find attached herewith directions issued to Central Government and State Governments by SC, for your information.
22nd December 2012 From India, Mumbai

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File Type: pdf DIRECTION BY SC.pdf (1.9 KB, 723 views)

Dear Mr Anup,
Greetings for giving popurlarity to BOCW Act.
I want to know if this cess once paid by the owner of the land and builinding can be recovered from the Contractor. Our organization is constructing an institutional building. Our organization was required to pay Construction Cess @1% at the time of issue of sanction letter by the local authority. Now we are recovering this Cess from the Contractor who is employing the labour for this project.
Please let us know if we are following the legally correct practice.
Looking forward to your guidance.
C.M. Lal Srivastav
22nd December 2012 From India, New Delhi
Dear C.M. Lal Srivastav ji,
In your case,the owner / PE (i.e. you) is liable to make payment of cess. However, you can recover the amount from contractors if you have a clause to this effect in the contract with them. If there is no clause in the contract, in my view, you can not recover it.
22nd December 2012 From India, Mumbai
Dear Keshav Korgaonkar Anup ji,
Thank you very much for your prompt response. It is certainly a lamp of guidance for us. Can I give you a little more trouble! To which Section of the BOCW Act or rules can I link your advice. I shall be immensely thankful to your response.
C.M. Lal Srivastava
22nd December 2012 From India, New Delhi
Dear All,
hai this is santhosh.i am working ,as an HR OFFICER .Our company manufacture bulk drug(API'S).i need u r help
regarding i would thinking that sriam means S:Scope,R:Rearch and development,I:Idia,A: Abilty,M: Management and need definition to these.
our company have GMP & WHO GMP Certificate.Now it is growing company so we are going to implement HR i need u r suggestion
so i need to implement it.
Thank u.
23rd December 2012 From India, Hyderabad
Dear C. M. Lal Srivastava ji,
Thank you for your query. It is an opportunity for me to review myself. I certainly give you my fresh views in this subject. However, I need some time. I will respond you as early as possible.
24th December 2012 From India, Mumbai
Dear C. M. Lal Srivastava ji,

As I said earlier, you have given me an opportunity to review my self. Thank you very much once again for the query.

My reply is as under:

In my view, this entire enactment is full of ambiguities.

In this Act nowhere it is mentioned that Principal Employer is liable or contractor is liable or both the principal and contractors are liable to pay this Cess.

On this issue i.e. on liability of the Cess, to my knowledge, there are couples of case laws. Some of them are:

M/s. Gannon Dunkerley & Co. Ltd. vs. State of Madhya Pradesh and Others. 2010 LLR 184 (MP HC);

Adani Agri Logistics Limited and Another vs. The State of Haryana and Others. 2010 LLR 752 (Punjab & Haryana HC);

Builders Association of India v. UOI [(139) 2007 DLT 578];

New India Construction Company v. State of Haryana.

From the above case laws I have not come to any concrete conclusion as to who is liable for the Cess. But I could conclude one thing in my entire review that the liability and responsibility are two separate aspects.

And accordingly, to my view, both the Principal Employer and the contractors are liable for this Cess. But it is the responsibility of Principal Employer to make the payment of Cess.

This is because:

i. the assessment of Cess is done on the basis of total construction cost (excluding land cost and compensation paid / payable under WC); The total construction cost is of the Project and not of Contractor to my understanding;

ii. the information to be furnished to the assessment officer in 'Form I' is done by the Principal Employer and not by Contractor(s). The assessment order is passed on the basis of this information in 'Form I'; and

iii. it is just impossible to the government machinery to make an assessment of Cess and collect the same contractor wise. There are so many contractors in each construction site.

The above views are my personal views from the study which I have made on this subject. There is a need to take up the ambiguities in this entire enactment, which are in numbers, with appropriate level. The appropriate level is not the Government officers.
25th December 2012 From India, Mumbai
Dear Keshav ji,
Greetings and Merry Christmas!!
I am immensely grateful to your efforts and time dedicated to the review of matter pertaining to recovery of Labour Cess. I really respect your opinion and understanding of the issue with reference to the judgment of the courts in the given context. I fully subscribe to your views that the enactment is faught with ambiguities. The term "total cost of construction" is a term which needs to be defined with precision. It is to be deliberated whether the "cost of construction" will be limited to the cost of civil works only or it will cover civil, plumbing, elecrical fittings internal and external, interiors with furniture etc. This will be highly confusing. There may be instances where turnkey contracts are given by the owner for construction of a
25th December 2012 From India, New Delhi
In continuation to above comments which got posted incomplet:

There may be isntances where turnkey contracts are given by the Owner for construction of a building. In such cases the total cost of construction will be determined with reference to the final amount of the bills. Nonetheless it will be even then a matter of clarification and decision as to what will amount to total cost of construction.

The aspect of liability and responsibiliyt have been shown to be separate. The liability and responsibility go together on the analogy of rights and duties. The responsibility of the PE would be fulfilled if it is ensured by it that Labour Cess is recovered from the contractor whether it be one as in case of turnkey contract or more than one if more than one contractor are engaged for different activities. Therefore the main issue involved in the matter is that whether PE/OWNER is justified to recover the Labour Cess from the contractor. I think your earlier opinion still subsits in view of what you have just explained in the latest reply.

I once again thank you for the concern, interest and pains taken in the matter brought to your kind notice through Citehr. I am placed at Delhi and will be pleased to reciprocate same interest and dedication in case you need any assistance from me. My ID is . I have rich professional experience in contract management, government service rules with respect of disciplinary and vigilance cases and administrative matters etc

Wish you Merry Christmas and a very Happy New Year 2013.


C.M. Lal Srivastava
25th December 2012 From India, New Delhi
Dear All,

Further to my various posts in this Thread, I wish to share that the Supreme Court has order for the complete implementation of Building and other construction workers Act and Cess Act by all the States and and the union territories.

This news I got it just now while browsing. I could not find the date of the order. But I feel it should be of September or October 2012.

The Supreme Court bench comprising Justice A.B. Patnaik and Justice Swatentar Kumar passed an order in contempt petition directing the CAG to submit its report within two months from the date of order regarding the non-implementation of Building and other construction workers Act, 1996 where all the States and the union territories are made parties.

After long proceeding the Supreme Court itself asked the petitioner to file a contempt case against all the non complying states and the union territories. So the present Contempt Petition was filed under Section 2 (a) of the Contempt of Court Act, 1971 in violation of Hon’ble Court orders in NCCCL Vs Union of India & Others (WPC no. 318 of 2006) where the Hon’ble Court has directed the Respondents to set up the Welfare Boards as per the implementation of the Building And Other Construction Workers (Regulations Of Employment And Conditions Of Service) Act, 1996 (in short the Act) and The Building And Other Construction Workers Welfare Cess Act 1996 (in short the Cess Act) in the respective States and Union Territories in India.

The Hon’ble Court also directed the respondents to deposit the Cess amount which is to be collected from principal employer i.e. the construction companies in the Nationalized Banks only. And the cess is to be disbursed accordingly to the workers as per the appropriate section of the act from the Welfare Board account.
4th January 2013 From India, Mumbai
Dear All,

I am sharing as under three articles published in last couple of days on Construction Workers in Maharashtra.

PTI: Mumbai, Jan 04 2013 The Financial Express

Maharashtra govt makes registration of construction workers mandatory

Mumbai: Maharashtra government has decided to make registration of construction workers involved in its projects mandatory.

The construction workers welfare board has a corpus fund of Rs 1000 crore but due to shortage of beneficiaries the money is lying unutilised.

"So far, only Rs six lakh have been spent. Hence, we have decided to make registration of the workers in projects undertaken by government agencies like MMRDA, BMC mandatory," Labour Minister Hassan Mushriff said.

He said contractors should inform the board about the labourers hired by them.

Workers in the housing construction sector do not register with the board. There are around five lakh workers in this sector in the Mumbai -Thane belt. Till September 1, 2012 only 72,218 labourers have registered.

Mushriff said his department will undertake a drive propogate Aam Aadmi Bima Yojana (AABY) which covers death and disability insurance for the benefit of rural landless farmers.

The drive to register beneficiaries will be taken up from January 26 to February 10. Last year, 15 lakh beneficiaries were registered under the scheme and 7,000 people got benefit of death claims.

Stuti Shukla : Mumbai, Mon Jan 07 2013, The Indian Express

Labour welfare fund under-utilised: State

A year-and-a-half after the state started levying 1 per cent cess on the construction cost of projects to raise funds for the welfare of labourers, nearly Rs 1,000 crore has been collected. However, only Rs 6 lakh has been actually utilised so far.

Lack of registration of labourers by builders, little awareness among labourers and government apathy are being seen as the biggest reasons behind underutilisation of the funds. This money can be utilised under 13 schemes meant for labour welfare such as scholarships for labourers’ children, Rs 2-lakh compensation for the family in case of death, low-cost housing, etc.

According to the Building and Other Construction Workers Act 1996 (BOCW), one per cent of the total amount of every construction project worth Rs 10 lakh or more, private or public, must be submitted to the state labour ministry under the head ‘welfare cess’. In Maharashtra, the project cost cap was lowered to Rs 5 lakh and the rule was brought into effect in August 2011.

State Labour Minister Hasan Mushrif said while the the rate at which the amount collected is being utilised is slow. “We have decided to make it mandatory for all government and semi-government agencies to register labourers involved in construction activities in their projects. We have asked MMRDA to register construction workers at Metro and monorail sites and BMC to register workers in its major projects,” said Mushrif.

An estimated five lakh labourers are involved in various construction activities across Mumbai and Thane, of whom only 25,000 have been registered with the Labour Department so far, Mushrif admitted.

For a labourer to get registered, the builder has to produce a certificate stating that he has worked with him for a minimum of 90 days.

A bureaucrat from the Labour Ministry said, “Builders are not serious about getting labourers registered. Moreover, labourers are not aware about this rule.”

The Labour Welfare Board collected Rs 58 crore between 2007 and 2011. Mushrif said publicity campaigns are being planned to create awareness.

New Delhi, Jan 4: The Hindu Business Line

Kharge flays States for under-utilisation of construction cess

The Union Labour Minister Mallikarjun Kharge on Friday criticised States for not utilising huge amounts of funds meant for labour welfare, such as the construction cess. He also pointed at gross under-utilisation of funds meant for skill development, a key focus area of the UPA Government.

Addressing the 45th session of the Standing Labour Committee here, Kharge said only about 15-20 per cent of the funds had been spent. If the money collected for labour welfare is not spent, how can social security be ensured to workers in the informal sector, he added, expressing fears over lower outlay for the Ministry in the next Budget.

According to a report by the Parliamentary Standing Committee on Labour, out of a total Rs 4,316.94 crore cess collected by States, only about Rs 736 crore had been spent till September 2012.

Till September 2012, Delhi had collected the highest cess at Rs 656.29 crore but spent only Rs 28.36 crore, followed by Karnataka, which collected Rs 644.87 crore but spent only Rs 5.45 crore. Andhra Pradesh collected over Rs 472 crore but spent only Rs 12.78 crore.

Kerala had the best record, with over 16 lakh registered construction workers, the State collected a cess of Rs 459.07 crore and spent Rs 351.68 crore on their welfare and other benefits.

Maharashtra, Uttar Pradesh, Uttarakhand, Himachal Pradesh and Goa were among the States that collected cess but had spent nil amount till September.

A one per cent cess is levied on the cost of construction incurred by employers to create a fund for workers in case of accidents, old age pension, loans, medical expenses, etc.

While Kharge blamed the States for non-utilisation of construction cess, the Parliamentary panel, headed by Hemanand Biswal, put the ball in the Labour Ministry’s court. Noting the complete lack of awareness about the scheme, it had asked the Labour Ministry, in its September report, to take steps to ensure that more workers were registered and could avail of the benefits.

According to one estimate, there are close to 30 million workers in the construction sector in India, but only about 67 lakh are registered.
7th January 2013 From India, Mumbai
Dear sir,
I just wanted to know that whether in following case labour cess is deducted or not.
one of my client being proprietorship, carrying repair and maintenance work of water tank truck under contract from Gujarat Govt. Water Department. Said dept. is deducting TDS and Labour Cess @ 1% each of payment amount respectively. They are giving TDS Certificate for 1% deduction but nor for Labour Cess.
Kindly confirm me whether labour cess is applicable on contractor of body work of water tank truck ?
Thanking You
Waiting for your valuable reply
Vishal Bosamiya
22nd July 2015 From India, Mumbai
Dear All
A company has purchased a lad, now they want to fillt with soil to make it in road level. It is a pre construction activity. Whether the companr require BOCW registration for that. whether the comany has to pay CESS for that.
Please advice
8th July 2016 From India, Kolkata
We are doing plumbing work in New Delhi.Our Employer is registered with BOCW and paying labour cess.But there labour consultant is saying that we have to get registered in BOCW but our consultant is saying as the employer is registered with bocw there is no requirement of contractor to get this registered for the same site as the principal employer is already registered and paying the cess.Kindly advise if we both require to register.
16th August 2016 From India, New Delhi
Dear Vishal Bosamiyaji,
It seems to me that the labour cess being deducted from the bill towards carrying out repairs and maintenance work of water tank / truck is not under BOCW Act. It may be a local cess i.e. cess collected by local body .
I came across such cess being collected by local bodies and called it as labour cess.
You need the find out from the party who is deducting such cess. You will get correct picture only from the party collecting it.
The labour cess which we are discussing in current thread is under BOCW Act which is applicable to construction sites and not otherwise.
16th August 2016 From India, Mumbai
Dear Soubhikji,
In my view, the activity of land leveling prior to actual construction activity will not fall under the scope of BOCW Act and no cess is payable on this work.
However, if you start the work of land leveling after obtaining IOD or similar permission to construct a building from respective authority, your such work of land leveling may fall under the scope of BOCW Act and you will be liable to pay cess in case you take the cost of such work of land leveling in total project value.
It all depends upon how you take it or interpret it.
16th August 2016 From India, Mumbai
Dear Ncech17r,
Registration under BOCW Act and payment of Cess under the said Act are two different things.
Cess is payable on total project cost and not on registration. In any construction project, cess is even paid on the work by a contractor who has less than 10 construction workers having no registration under BOCW Act.
Your query on registration by contractors is addressed in below given link:
<link no longer exists - removed>
16th August 2016 From India, Mumbai
Dear Mr.Korgaonkar, Thanks for your reply.But my question wad different.If the PE is registered in BOCW for a construction site is registration for the same site is needed by the contractor for BOCW.
18th August 2016 From India, New Delhi
Dear Ncech17r,
Have gone through the link given in my post above?
In the said link if you read my post, I am sure you will not have any further question in this regards. My answer is very elaborated.
Still if you have a question, you are advised to consult any expert in the subject.
18th August 2016 From India, Mumbai
Dear Sir
I have some doubt, we have received contract for construction of Commercial Building including new construction work & finishing work (i.e. Fire Work, HVAC Work, ELV, Lift, Painting, Furniture and all work after construction of a building)
my query is whether cess amount would be payable on construction part or construction and finishing part i.e. total workorder value.
19th October 2016 From India, Vadodara
Dear Paras Parmar ji,
Cess is payable on entire construction cost excluding land cost and amount of compensation paid under WC Act.
The construction cost starts from approval of IOD till completion of construction whatever you incur inclusive of Fire Work, HVAC Work, ELV, Lift, Painting, Furniture etc. In some States, it is told to me, the cost of plant and machinery to be used in the process in the proposed factory is considered not as construction cost.
Fire Work, HVAC Work, ELV, Lift, Painting, Furniture etc. before obtaining certificate of completion of construction is construction work undoubtedly and cess is payable on it.
19th October 2016 From India, Mumbai
Sir, I want to know the workmen compensation act, in this case for a construction site when and how to register in this act and what are the benefits. Pls clarify Rajiv Singh
31st October 2016 From India, New Delhi
Dear Rajiv Pratap
Whenever you start a new discussion, kindly start a new thread with suitable heading. If you are asking question in irrelevant thread, it will be unnoticed and you will not get the proper answer.
Nowadays the Construction industries are also covered under ESI Act. But if the construction site is located in non coverage area, then you can go with Employees Compensation Act.
There is no registration required under this act. You must obtain the Group Accident policy for the workers engaged by your establishment. You can contact any Insurance adviser to obtain the Group Personal Accident Policy,
31st October 2016 From India, Kumbakonam
Dear Mr. Baskar ji,
With due respect to you, I have a question to you, sir.
You have suggested Group Accident policy. Premium to this GAP is very less as compared to policy under Workmen / Employee Compensation Act.
If GAP can be substituted by policy under EC Act , then why the Insurance company should keep this product in market which is costlier?
31st October 2016 From India, Mumbai
Dear Sir,
I am from Andhra Pradesh. Today, I received a Notice from Labour Department saying that I need to pay Welfare Cess of 1% on the cost of factory Building. And my auditor is saying that there is a supreme court judgment against the payment of 1% welfare cess to the Department.
Kindly provide the Judgment copy where we can save some lakhs of rupees in this regard.
28th February 2017 From India, Ongole
Dear Kalyan ji,
You are advised to ask for the judgement from your auditor who told you that there is a judgement against the cess. To my knowledge, there is no such judgement. On the contrary Hon’ble Supreme Court has directed the to deposit the Cess amount which is to be collected from principal employer i.e. the construction companies in the Nationalized Banks only in in NCCCL Vs Union of India & Others (WPC no. 318 of 2006). Hon’ble Supreme Court has also directed to set up the Welfare Boards as per the implementation of the Building And Other Construction Workers (Regulations Of Employment And Conditions Of Service) Act, 1996 and The Building And Other Construction Workers Welfare Cess Act 1996 in the respective States and Union Territories in India.
28th February 2017 From India, Mumbai
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